Australian Energy Market Amendment (Minor Amendments) Bill 2008

Bills Digest no. 92 2007–08

Australian Energy Market Amendment (Minor Amendments)
Bill 2008

WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.

The main purpose is to amend the
reference to 2007 to a reference to 2008 in the Administrative
Decisions (Judicial Review) Act 1977 (ADJR Act), the
Australian Energy Market Act 2004 (Australian Energy
Market Act), the Australian Energy Market Amendment (Gas
Legislation) Act 2007 (Australian Energy Market Amendment (Gas
Legislation) Act) and the Trade Practices Act 1974 (TPA)
to take account of the change in the timing of the introduction of
legislation which will establish a national gas access regime.

Over the past decade, the energy sector has undergone major
reform. Much of the early reform was under the umbrella of the
National Competition Policy which arose from the report of the
Independent Committee of Inquiry into National Competition, known
as the Hilmer Report . Reform included provision for third parties
to gain access to gas infrastructure such as pipelines under Part
IIIA of the TPA. More recently, reform entailed establishing the
Australian Energy Market
Commission and the Australian
Energy Regulator.

Problems with the access regime led the Commonwealth Government
to ask the Productivity Commission to report on ways the regime
might be improved. In 2004, the Government released the
Productivity Commission s report, which was titled Review
of the Gas Access Regime . The Productivity Commission
concluded that access arrangements could potentially discourage or
distort investment in gas infrastructure.[1] It proposed, among other things, moving
away from cost-based price regulation and relying instead on price
monitoring.[2] The
Productivity Commission also advocated arrangements providing scope
to exempt new gas pipelines (on a case-by-case basis) from access
provisions for a 15 year period.[3] When the Government released the report, it
indicated that the
Ministerial Council on Energy (MCE) would be charged with
developing a response to the Commission s recommendations.[4]

In May 2006, the MCE
released its
response to the Productivity Commission s report. The MCE noted
that its response contained:

key policy decisions which will be incorporated
in the new National Gas Law and National Gas Rules. In accordance
with the Productivity Commission s key recommendations, the
following changes will be made to the Gas Access Regime:

an overarching objects clause will be introduced to clarify the
regime s objectives;

changes will be made to the regime s scope to align it with the
National Access Regime; and

a light handed regulatory option will be introduced.

The then Treasurer and the Minister for Industry Tourism and
Resources
welcomed the MCE s response stating that it would be
implemented through legislative amendments to the Gas Access
Regime, following consultation on the draft legislative
package.[5]

Agreement was reached between the Commonwealth and the States
and Territories to establish a harmonised national gas access
regime, which would apply in all participating jurisdictions. The
proposed mechanisms are a National Gas Law and National Gas
Rules.

The first step in the process of establishing the national
regime included releasing drafts of the Law and the Rules and
seeking comment on them. On 19 July 2007,
second exposure drafts were released. In October 2007, the
Standing Committee of Officials of the MCE released a
response to comments on the second exposure draft of the
National Gas Law.

The second step in the process is the enactment of lead
legislation by South Australia in 2008. South Australia will enact
the National Gas Law as the Schedule to the proposed National
Gas (South Australia) Act 2008. The Rules appear as
National Gas (South Australia) Regulations under Part 3 of the
National Gas (South Australia) Act 2008.

The third step is that other participating jurisdictions with
the exception of Western Australia will follow South Australia by
enacting application legislation which will mirror the South
Australian legislation. Western Australia, for its part, will pass
complementary legislation to give effect to the National Gas
Law.

The timing for the introduction of the South Australian
legislation has slipped from 2007 to 2008. According to the
Minister s second reading speech, the delay is the result of
proposed changes to the National Gas Law and Rules to allow for a
gas
bulletin board.[6] The change in timing has resulted in the need to amend
the reference to 2007 in a number of Acts to a reference to 2008
.

The provisions are essentially technical in nature and fall into
three categories:

those where a reference to 2008 is substituted for 2007 as
follows:

- Schedule 1 which amends the
ADJR Act at clauses 1 and 2

- Schedule 2 which amends the
Australian Energy Market Act at clauses1, 3-6, 9,
12 and 13, and

- Schedule 4 which amends the
TPA at clause 1.

those where the words the National Gas Access (Western
Australia) Law (within the meaning of the National Gas Access
(Western Australia) Act 2008 of Western Australia) are
substituted for the National Gas Access Law set out in Schedule 1
to the National Gas Access (Western Australia) Act 2007 of
Western Australia as follows:

- Schedule 1 which amends the
ADJR Act at clause 3

- Schedule 2 which amends the
Australian Energy Market Act at clauses2, 7, 8,
10 and 11, and

Richard Webb
22 April 2008
Bills Digest Service
Parliamentary Library

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